McLennan Companies to Acquire Kroll Inc.
$1.9 Billion Transaction Enhances MMC's Position
as World's Leading Provider of Risk Services
YORK, NEW YORK, May 18, 2004—Marsh & McLennan Companies, Inc.
(MMC) and Kroll Inc. announced today that MMC will acquire Kroll,
the world's leading risk mitigation services firm. The transaction
will broaden significantly the range of MMC's risk and insurance
services businesses and enhance its leadership position in risk
Under the definitive
agreement, signed today, MMC will acquire Kroll in an all-cash
$1.9 billion transaction in which Kroll shareholders will receive
$37 for each outstanding share of Kroll common stock they own.
The price to be paid by MMC represents a 31.7 percent premium
over Kroll's closing stock price of $28.10 on the Nasdaq National
Market on May 18, 2004.
Greenberg, chairman and chief executive officer of MMC, said:
“Our clients face a growing number of risks that are increasing
in complexity and severity. We deliver risk services to respond
to a wide spectrum of client needs, from advisory services to
claims management, with the goal of helping clients to reduce
their total cost of risk. The addition of Kroll will broaden and
deepen the capabilities of our fast-growing risk consulting and
advisory businesses by adding services which clients need to reduce
the impact of an adverse event. Kroll has multiple high-growth
businesses under a strong brand. It expands our capacity in several
important sectors that complement our existing businesses, such
as corporate restructuring, business intelligence and investigations,
security services, employee screening, and electronic evidence
and litigation support.
transaction is particularly attractive because we will be adding
to our team some of the world's best risk experts, including Jules
Kroll, founder and executive chairman of Kroll, and Michael Cherkasky,
chief executive officer of Kroll. Kroll's business relationships
around the world fit well with ours, will help us serve clients
better, and will accelerate our revenue and earnings growth to
increase value to shareholders.”
Kroll said: “In joining MMC, we become part of the industry leader
in risk management, a company with a great management team, a
history and culture of outstanding client service, and a great
future. We look forward to working with Jeff Greenberg and his
colleagues and to delivering the benefits of this exciting transaction
to our clients.”
Cherkasky said: “This transaction is another example of our commitment
to maximizing shareholder value and is a winning proposition for
our clients and employees alike. Our mission as the premier global
risk mitigation firm remains the same. But by combining the world-class
risk services practices of MMC and Kroll, we will offer a compelling
range of services that will enable us to attract and serve more
clients in more ways.”
combination of MMC and Kroll will produce a number of important
benefits for clients, including the following:
- Ability to Match Service Offerings to Client
Needs: The acquisition of Kroll will enable Marsh to offer risk
clients a combination of services which can be deployed in a
way that provides unique benefits in mitigating the complexity
and severity of risk. Marsh is distinguished for its advice
to clients on operational risk, workplace risk, enterprise risk,
and claims management. Kroll has professional expertise and
a market leadership position in corporate restructuring, forensic
accounting, business investigations, and electronic discovery.
- Expanded Processing Services: The acquisition
of Kroll not only increases Marsh's risk processing services
capability, specifically to provide clients employee-screening,
vendor-screening, and credit-screening services, but also provides
the foundation for further expansion in processing.
- Global Reach: Like Marsh, Kroll has a global
client base with a strong presence in Europe that strengthens
the Marsh global risk consulting platform. Although Marsh and
Kroll have clients in common, they have different sets of executive
relationships that both firms can use to provide additional
services to clients.
of the transaction is expected to occur in the third quarter of
2004. MMC believes that cost savings and the additional revenues
resulting from the combination of the two businesses will make
the transaction accretive in 2005.
transaction was unanimously approved by both MMC's and Kroll's
boards of directors. Kroll's board recommends that Kroll shareholders
vote in favor of the transaction at a shareholder meeting that
will be scheduled as soon as practicable. Mr. Kroll, who owns
7.3 percent of Kroll's shares, Mr. Cherkasky, and eight other
members of Kroll's senior management have committed to vote their
shares in favor of the transaction.
completion of the transaction, Kroll will become part of Marsh
Inc., MMC's risk and insurance services subsidiary. Marsh Risk
Consulting and Kroll will be combined under Mr. Cherkasky's leadership.
Mr. Kroll will be named a vice chairman of Marsh Inc.
of the transaction is subject to the expiration or early termination
of the applicable Hart-Scott-Rodino waiting periods and to Kroll
financial advisor for the transaction was Greenhill & Co.,
LLC. Kroll's financial advisors for the transaction were Goldman
Sachs & Co. and Morgan Joseph & Co. Inc.
Greenberg, Cherkasky, and Kroll, MMC chief financial officer Sandra
Wijnberg, and Ray Groves and Roger Egan, chairman and president
of Marsh Inc., respectively, along with Donald Birdsong, head
of Marsh Risk Consulting, will discuss today's announcement via
teleconference and live audio webcast at 8:30 a.m. (EDT) on Wednesday,
May 19. To participate in the audio webcast (which will be listen-only),
as well as to view additional information about the transaction,
go to www.mmc.com. A replay of the webcast will be made available.
continuous telephone replay will be available beginning Wednesday,
May 19 at 1:00 p.m. (EDT) and continuing through midnight (EDT)
Wednesday, June 2. To listen to the replay, please dial (888)
203-1112. Callers from outside the United States may listen to
the replay by dialing (719) 457-0820. The access code for both
numbers is 647531.
Inc. (Nasdaq: KROL), the world's leading independent risk consulting
company, provides a broad range of investigative, intelligence,
financial, security, and technology services to help clients reduce
risks, solve problems, and capitalize on opportunities. Headquartered
in New York with more than 60 offices on six continents, Kroll
has a multidisciplinary corps of more than 3,200 employees and
serves a global clientele of law firms, financial institutions,
corporations, non-profit institutions, government agencies, and
individuals. For more information, please visit: www.krollworldwide.com.
has four primary business segments: Consulting Services, Corporate
Advisory and Restructuring Services, Background Screening Services,
and Technology Services. For the year ended December 31, 2003,
Kroll reported net sales of $485.5 million, and income from continuing
operations, after restructuring charges, of $46.2 million. For
first quarter 2004 net sales were $165.3 million, a 60 percent
increase from first-quarter 2003.
is a global professional services firm with annual revenues exceeding
$11 billion. It is the parent company of Marsh Inc., the world's
leading risk and insurance services firm; Putnam Investments,
one of the largest investment management companies in the United
States; and Mercer Inc., a major global provider of consulting
services. More than 60,000 employees provide analysis, advice,
and transactional capabilities to clients in over 100 countries.
Its stock (ticker symbol: MMC) is listed on the New York, Chicago,
Pacific, and London stock exchanges. MMC's website address is
2003, revenues from MMC's risk and insurance services businesses
totaled $6.9 billion. Marsh Inc., MMC's largest business measured
by both revenues and earnings, is the world leader in delivering
risk and insurance services and solutions to clients. It has approximately
38,000 employees, more than 400 offices, and serves clients in
more than 100 countries.
more complete information go to the Kroll International’s web
site or contact:
here to return to the E-zine and/or close this window